Blow for Borders as administrator pulls out over conflict of interest

Borders UK, the struggling book retailer, suffered a fresh blow today after
BDO Stoy Hayward said it was unable to act as administrator due to a
conflict of interest.

Borders administration likely 'within hours'Photo: Bloomberg News

1:10PM GMT 26 Nov 2009

The shock withdrawal came as the retailer was about to ask the court to approve the appointment of the accountants as adminstrators to the 45-store chain.

BDO Stoy Hayward said in a statement on Thursday that it had uncovered the conflict of interest while "identifying the risks involved in taking on any client appointment".

Borders is looking to appoint administrators after last-ditch attempts to find a buyer for the company failed. Around 1,000 jobs are at risk.

The company, owned by Valco Capital Partners, the private equity arm of restructuring specialist Hilco, has suffered from falling sales over recent years due to pressure from supermarkets and the internet.

It has been badly affected by the withdrawal of supplies from publishers over recent days and its website has not been taking orders since the start of the week.

Related Articles

The publishing industry had wanted the chain to survive as it entered the busiest month of the year. On Wednesday, The Publishers Association, the publishing industry’s trade body, was unable to find a way for publishers to continue trading with the chain.

Borders was bought by its own management from Risk Capital, Luke Johnson’s private equity company, earlier this year. The management was backed by Valco.

Waterstone's, the chain owned by HMV Group, is thought to be interested in a number of shops.